[Writers note: In late 2014, we wrote this article. We had not invented our CRM technology, but we knew that there had to be something better than simple demographic data to segment customers.]
The customer journey is complex. It has always been that way. The human mind is not something you drop into a Skinner Box. There has not been a linear path to anything since the days of the butcher, baker and candlestick maker. Follow that?
When attempting to sell something, build brand, profitably, you have far too many things to contend with. Where do you start?
One place I like to start is with finding customer density and potential customer density. Ideally, starting in neighborhoods and then down to the individual. In the chart attached to this post, you see an example of great differences in eCommerce sales density vs store sales density. By avoiding averaging of customers, by area, by segment by product sold, you avoid average results.
My 4 items to look at:
- Building audience, one area and person at a time. Start by finding audiences and determine where audiences are not. That is the most basic of segmenting audiences. The marketing ecosystem often oversells media. Just look at your CTR and conversion rate. Why have these numbers been accepted? I think it is this way, in part, because we average results. Add in Viewable impression data and up to 70% non-human traffic and something is wrong with how current technology chooses audience. Audience data, both cookie and pre-cookie is a critical first step. Avoiding averaged audiences is a great step. (2018 note: we are still firm believers in not averaging customers, but now we’re got a much better way to bucket them. Also, take a look at metrics beyond Google Analytics. Customers are more than just click-throughs. Our CRM has human activities that tell us why people buy.)
- Focus media in areas where the FULL customer journey will work – where things like quality display, social and search will create more brand search in dark areas. That is the point of all this, right? Where you drive early stage media should result in growing brand demand, no matter how small the business. (2018 notes: media media media. Oi. That’s all that was available in 2014! Pouring all of your money in media is not the best tactic because it’s still averaging your customers.)
- The customer journey will NOT work in areas where weak existing and future customers exist. The customer journey is too costly and that will be the case for the vast majority of people and neighborhoods in the world. I know of many companies who maintain great acquisition cost in 1,000 or so ‘nooks’ but see 10x the cost in 10,000 ‘nooks’. Follow? Can you get past the 1,000? Sure but start where it is profitable. So, don’t average areas. Focus on the “A” areas first and once that has been settled, the “B” areas deserve your attention.
- Why location? Something I will write about in coming posts. A: Real social circles. I bet you are not walking out of your house today in a pink suit. Why? Social circles. What we do in social environments, both on and offline impacts our purchase behavior. Something that has been well know since IBM did the original heat maps in 1899.
In summary: Taking a first step in customer segmentation and media segmentation helps a lot. It might cut some audience and media spend but in the long run, it drives sales growth in a predictable and profitable way.
In early 2015, I revisited this article, so here’s some almost 3-year-old commentary:
1 Feb 2015:
I have been running into some very interesting media examples. Some media is being mixed together several chains down. A mix of low value media with high CTR ‘gamed clicks’ averages out to average CTR, filled orders. Rotten to the consumer and buyer, good for the ad network and a poor plan for the long run for all.
2018 final notes:
When you develop a good strategy, updating your tactics keeps it working. In 2014, media was king so we had to play the game. In 2018, we’re saying pump the brakes on media. You can spend money on the right media, showing to the right audience, using the right message. We know other ways to speak to your customers, and we can get you look-a-like customers too. Make 2018 your year.